Nasdaq rebounds 1.1% as earnings week takes over
Published on October 20, 2026
The Nasdaq climbed 1.11% on Monday and clawed back much of its worst week since June. The bounce rests on one bet, that the money pouring into artificial intelligence will eventually pay off. Around a hundred US companies report this week, and they will answer that question for the market.
The Nasdaq bounced, but it bounced alone
Monday split the three big US indexes. The Nasdaq Composite added 1.11% to 26,430.89. The S&P 500 managed only 0.41% to 7,690.73. The Dow Jones ended lower at 51,966.03, down 0.07%.
That gap is the story. The gain came from the tech heavyweights, not from the whole market. Amazon rose almost 5% and Tesla 3.7%. Outside that group trading was listless. "Markets are starting the week on a tentative recovery footing," said Daniela Hathorn of Capital.com, quoted by TheStreet.
The VIX fell 1.55 points to 18.44. On Friday it had pushed above 20 for the first time since late July. Day to day nerves are cooling, but they have not gone. CNN's Fear & Greed Index actually dropped to 18 out of 100, deep in extreme fear, from 30 a week earlier, per Benzinga.
AI capex is what this earnings week is about
Netflix goes first, after Tuesday's closing bell. General Motors, RTX, 3M, GE Aerospace and United Airlines report before the open. Meta and Tesla land on Wednesday, alongside IBM and Texas Instruments.
What the market reads first is not the quarterly profit. It is the spending plan for the months ahead. "Watch capital expenditure guidance closely," wrote Liz Ann Sonders of the Schwab Center for Financial Research in Schwab's morning note.
The logic is simple. As long as tech groups keep raising AI budgets without showing the revenue to match, the Nasdaq runs on one leg. One warning on margins would send it back toward its October lows.
Yields and oil still weigh on valuations
The US 10 year yield pushed back to about 5.10% after last week's hotter than expected inflation print. At that level, every dollar of future profit is worth less today. Tech valuations take the hit first.
Oil is not helping. November WTI rose 2.22% to $103.66 after the Houthis claimed six attacks on Saudi Arabia in 48 hours, reports Newsquawk. December Brent is still above $109. Gold slipped toward $4,160 an ounce, pinned by the dollar and by long yields. Bitcoin is stuck near $82,000, capped below $84,000. The euro eased to $1.1210 and the yen stayed weak at 158.54 per dollar.
How far the bounce can run
Mike Wilson, chief US equity strategist at Morgan Stanley, calls this a mid cycle correction rather than the end of the bull market. He will not rule out another 5% to 10% decline if bond volatility stays high, while keeping an 8,000 year end target on the S&P 500, per TradingKey.
For now the S&P 500 has been boxed between 7,600 and 7,800 since August. The Nasdaq keeps running into its 50 day moving averages. Nothing gets settled until the big tech names speak. On a funded account, a week like this is mainly about cutting position size, a habit we break down in our guide to passing a prop firm challenge.
Key levels today
| Instrument | Level (support / resistance) | Change (Oct 19 session) | Scenario / what to watch |
|---|---|---|---|
| Nasdaq Composite | Resistance 26,614 (50 day averages cluster) | +1.11% | A close above 26,614 changes the nature of the bounce. Below 26,140, Friday's low becomes the target again. |
| S&P 500 | Resistance 7,700 then 7,740 (20 day average), support 7,610 | +0.41% | Above 7,740, the 7,800 to 7,845 zone comes back into play. Below 7,610, the September 16 low near 7,500 pulls. |
| Dow Jones | Resistance 52,010 (50 day moving average) | -0.07% | While the index stays under that line, the rotation out of tech is on hold. |
Economic calendar
- Tuesday 14:30 Paris : September housing starts, 1.30M expected against 1.275M. A clear miss strengthens the bet on a softer Fed on October 28, which supports the indexes.
- Tuesday 22:05 Paris : Netflix results, consensus at $0.82 per share on $12.87B of revenue. If the guidance disappoints, the Nasdaq loses its engine at Wednesday's open.
- Wednesday 16:30 Paris : weekly crude oil inventories. Another big draw after the previous 8.56 million barrels would push WTI toward $105 and add pressure on tech.
- Friday 15:45 Paris : S&P Global PMIs for October, services expected at 58.0 after 58.8. Below 55, the slowdown case returns and cyclicals break down. Dates and consensus via Investing.com.
The bottom line
The Nasdaq rebounded 1.11% on Monday, yet sentiment sits in extreme fear and the gain belongs to a handful of names. Netflix tonight, then Meta and Tesla on Wednesday, will decide whether US indexes push on or go back to test their supports.
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This is not investment advice. Information only.